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DANAHER CORPORATION

DANAHER CORPORATION2020 OVERVIEW2 Forward Looking StatementsStatementsinthispresentationth atarenotstrictlyhistorical,includinganys tatementsregardingDanaher santicipatedfinancialperformanceandanyot herstatementsregardingeventsordevelopmen tsthatweanticipatewillormayoccurinthefut ureare"forward-looking"statementswithint hemeaningofthefederalsecuritieslaws. Therearea numberofimportantfactorsthatcouldcauseac tualresults,developmentsandbusinessdecis ionstodiffermateriallyfromthosesuggested orindicatedbysuchforward-lookingstatemen tsandyoushouldnotplaceunduerelianceonany suchforward-lookingstatements. Thesefactorsinclude,amongotherthings,the highlyuncertainandunpredictableseverity, magnitudeanddurationoftheCOVID-19pandemi c(andtherelatedgovernmental,businessandc ommunityresponsesthereto)onourbusiness,r esultsofoperationsandfinancialcondition, theimpactofourdebtobligations(includingt hedebtincurredtofinancetheacquisitionofC ytiva) onouroperationsandliquidity,deterioratio noforinstabilityintheeconomy,themarketsw eserveandthefinancialmarkets(includingas a resultoftheCOVID-19pandemic),uncertainti esrelatingtoU.

complete divestitures and other dispositions, our ability to integrate the businesses we acquire and achieve the anticipated benefits of such acquisitions, contingent liabilities and other risks relating to acquisitions, investments, strategic relationships and divestitures (including tax-related and other contingent liabilities relating to ...

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Transcription of DANAHER CORPORATION

1 DANAHER CORPORATION2020 OVERVIEW2 Forward Looking StatementsStatementsinthispresentationth atarenotstrictlyhistorical,includinganys tatementsregardingDanaher santicipatedfinancialperformanceandanyot herstatementsregardingeventsordevelopmen tsthatweanticipatewillormayoccurinthefut ureare"forward-looking"statementswithint hemeaningofthefederalsecuritieslaws. Therearea numberofimportantfactorsthatcouldcauseac tualresults,developmentsandbusinessdecis ionstodiffermateriallyfromthosesuggested orindicatedbysuchforward-lookingstatemen tsandyoushouldnotplaceunduerelianceonany suchforward-lookingstatements. Thesefactorsinclude,amongotherthings,the highlyuncertainandunpredictableseverity, magnitudeanddurationoftheCOVID-19pandemi c(andtherelatedgovernmental,businessandc ommunityresponsesthereto)onourbusiness,r esultsofoperationsandfinancialcondition, theimpactofourdebtobligations(includingt hedebtincurredtofinancetheacquisitionofC ytiva) onouroperationsandliquidity,deterioratio noforinstabilityintheeconomy,themarketsw eserveandthefinancialmarkets(includingas a resultoftheCOVID-19pandemic),uncertainti esrelatingtoU.

2 S. lawsorpolicies,includingpotentialchanges inU. S. tradepoliciesandtariffsandthereactionofo thercountriesthereto,contractionsorgrowt hratesandcyclicalityofmarketsweserve,com petition,ourabilitytodevelopandsuccessfu llymarketnewproductsandtechnologiesandex pandintonewmarkets,thepotentialforimprop erconductbyouremployees,agentsorbusiness partners,ourcompliancewithapplicablelaws andregulations(includingrulesrelatingtoo ff-labelmarketingandotherregulationsrela tingtomedicaldevicesandthehealthcareindu stry),theresultsofourclinicaltrialsandpe rceptionsthereof,ourabilitytoeffectively addresscostreductionsandotherchangesinth ehealthcareindustry,ourabilitytosuccessf ullyidentifyandconsummateappropriateacqu isitionsandstrategicinvestmentsandsucces sfullycompletedivestituresandotherdispos itions,ourabilitytointegratethebusinesse sweacquireandachievetheanticipatedbenefi tsofsuchacquisitions,contingentliabiliti esandotherrisksrelatingtoacquisitions,in vestments,strategicrelationshipsanddives titures(includingtax-relatedandothercont ingentliabilitiesrelatingtopastandfuture IPOs,split-offsorspin-offs)

3 ,securitybreachesorotherdisruptionsofour informationtechnologysystemsorviolations ofdataprivacylaws,theimpactofourrestruct uringactivitiesonourabilitytogrow,risksr elatingtopotentialimpairmentofgoodwillan dotherintangibleassets,currencyexchanger ates,taxauditsandchangesinourtaxrateandi ncometaxliabilities,changesintaxlawsappl icabletomultinationalcompanies,litigatio nandothercontingentliabilitiesincludingi ntellectualpropertyandenvironmental,heal thandsafetymatters,therightsoftheUnitedS tatesgovernmenttouse,discloseandlicensec ertainintellectualpropertywelicenseif wefailtocommercializeit,risksrelatingtop roduct,serviceorsoftwaredefects,productl iabilityandrecalls,risksrelatingtoproduc tmanufacturing,ourrelationshipswithandth eperformanceofourchannelpartners,uncerta intiesrelatingtocollaborationarrangement swiththird-parties,commoditycostsandsurc harges,ourabilitytoadjustpurchasesandman ufacturingcapacitytoreflectmarketconditi ons,relianceonsolesourcesofsupply,theimp actofderegulationondemandforourproductsa ndservices,labormatters,internationaleco nomic,political,legal,compliance,sociala ndbusinessfactors(includingtheimpactofth eUnitedKingdom'sseparationfromtheEUandun certaintiesrelatingtosuchseparation),dis ruptionsrelatingtoman-madeandnaturaldisa sters(includingpandemicssuchasCOVID-19) andpensionplancosts.

4 Additionalinformationregardingthefactors thatmaycauseactualresultstodiffermateria llyfromtheseforward-lookingstatementsisa vailableinourSECfilings,includingour2020 AnnualReportonForm10-K. Theseforward-lookingstatementsspeakonlya softhedateofthispresentationandexcepttot heextentrequiredbyapplicablelaw,theCompa nydoesnotassumeanyobligationtoupdateorre viseanyforward-lookingstatement,whethera sa resultofnewinformation, ,definitionsandtheaccompanyinginformatio nrequiredbySECR egulationG canbefoundinthispresentationorinthe Investors sectionofDanaher swebsite, Allreferencesinthispresentation(1) tofinancialmetricsrelateonlytothecontinu ingoperationsofDanaher sbusiness,unlessotherwisenoted; (2) to growth orotherperiod-to-periodchangesrefertoyea r-over-yearcomparisonsunlessotherwiseind icated; and(3) tooperatingprofitbelowthesegmentlevelexc ludeamortization. Financial Highlights3 STRONG ADJUSTED EPS GROWTH & FREE CASH FLOW 29thconsecutive year that FCF exceeded Net IncomeEXPANDED MARGINS WHILE REINVESTING FOR GROWTH Core OMX +170bps and Adjusted Gross Margin ~58% Innovation & commercial investments driving market share gainsCLOSED $21B ACQUISITION OF CYTIVA (FMRLY.)

5 GE BIOPHARMA)DELIVERED + CORE REVENUE GROWTH Life Sciences + , Diagnostics + , EAS was an exceptional year for DANAHER + REVENUE GROWTH+170 BPSCORE OMX149%FCF / NI CONVERSION +43%ADJUSTED EPS GROWTH(operating profit margin expansion)2020 core revenue growth includes Cytiva. DIAGNOSTIC TESTINGP oint-of-care (POC) rapid molecular testsPrimer & probe kits provide detection component in diagnostic testsPOC blood gas analyzers & tests in ER, ICUA ntibody serology tests and high-throughput antigen test4 Playing a Pivotal Role in the Fight Against COVID-19 Living Our Shared Purpose: Helping Realize Life s PotentialVACCINES & THERAPEUTICSS upporting research, development and production of COVID-19 vaccines and therapiesInvolved in the majority of the >400 vaccine & therapeutic projects underway globally, including every Operation Warp Speed vaccine in the As of March 1, 2021 DANAHER TodayPurpose-driven science & technology leader$ DANAHERTOTAL REVENUE5 LIFE SCIENCES$ DIAGNOSTICS$ ENV.

6 & APPLIED$ All financial metrics reflect FY 2020 results from continuing chart is a % of total revenue and includes Cytiva2020 total annual BY END-MARKET:Biopharma~25%Molecular Dx~10%Other Dx~25%Applied~20% a stronger, better Danaher201520182020 TOTAL REVENUE~$21B~$20B~$22 BCORE REVENUE GROWTH+LSD+MSD+HSDRECURRING REVENUE~45%~70%~72%ADJUSTED GROSS MARGIN~53%~56%~58%FREE CASH FLOW$ $ $ PORTFOLIO MOVES6 Portfolio Has Evolved Meaningfully2015 metrics shown include Fortiveand Envista; 2018 metrics shown include Revenue is shown as a % of total core revenue growth includes Biopharma Acquisition (Cytiva)7 Transformational addition to our Life Sciences platformGLOBAL LEADER IN FAST-GROWING, HIGHLY-ATTRACTIVE BIOPROCESSING MARKET Closed the transaction March 2020 Talented & innovative team with industry-leading expertise Transition update: Re-branding to new Cytivaname Standing-up the business as a new DHR OpCo DBS introduction & training>$4 BCYTIVA 2020 TOTAL ANNUAL REVENUE>50%DHR LIFE SCIENCES PLATFORM BIOPROCESSING REVENUE+HSDANTICIPATED LONG-TERM CORE REVENUE GROWTH RATE ~25%20182020<10%2015As a % of total revenueKEY SECULAR GROWTH DRIVERSS trong secular drivers underpinning growth opportunitiesServing Attractive End-Markets8 LIFE SCIENCES Shift in medicine: biologics Evolution of LS research.

7 GenomicsWATER QUALITY Water scarcity Sustainability of water resourcesPRODUCT ID Packaging proliferation Global brand consistencyDIAGNOSTICS Molecular Dxpenetration Decentralization of health careHigh Growth Markets | Regulatory Requirements | Workflow EfficiencyBioprocessing: Where We Play & How We Win9 Filtration Skids & ConsumablesConcentration & Sterile FiltrationMediaBioreactorDepth FilterChromatographyColumnsPolishing ColumnDevicesBags & MixersHelping customers bring more life-saving drugs to market fasterCell culture & SUTC hromatographyFiltration~$ BIOPROCESSING REVENUE 2020 ResinsFOCUSED ON AREAS OF HIGHEST IMPACT & MAXIMUM VALUE TO CUSTOMERS: Facility efficiency Manufacturing flexibility Development partnership Speed to market LEADING PLAYER WITH BROADEST OFFERING ACROSS ENTIRE WORKFLOW Processing time Operating costs Footprint Capital spendingMolecular Diagnostics: Where We Play & How We Win10 HOW WE WIN Largest global installed base: >30,000 instruments Broadest test menu: >35 OUS, >20 in the US Workflow + speed + accuracyUnique & leading position in critical point-of-care environmentsCepheid GeneXpert Systems & test cartridgeBEST-IN-CLASS MOLECULAR DX Unique position at critical, point-of-care settings Simplified workflow: sample in, result out Scalable, random-access systems2016 (At Acq.)

8 20192020 ANNUAL REVENUE & TOTAL INSTALLED BASE~$ ~$1B~$2B>10K>30K>20 KHigh quality recurring revenue across the portfolioStrong Recurring Revenue11 PORTFOLIO UNITED BY A COMMON BUSINESS MODEL Steady consumables stream off extensive installed base High value, mission-critical applications that demand high quality products to meet regulatory requirementsBENEFITS & OPPORTUNITIES Reduced risk of revenue volatility Increased customer intimacy Higher margin opportunities enable reinvestmentEXAMPLESRAZOR / RAZOR-BLADE Consumables revenue 2-5X instrument revenue Long-term contracts SPEC D IN SERVICE FDA-approved or cleared processes biologic drug production Like-for-like replacements EPA methods Increase in attachment rates +DD service revenue growth y/yTotal DHR RevenueBy Mix Recurring72%Non-recurring28%All financial metrics reflect FY 2020 results from continuing Revenue Growth+Margin Expansion+Strong Free Cash Flow+Acquisitions=TOP QUARTILE EPS GROWTH &COMPOUNDING RETURNSHow We Create Value.

9 Running the DANAHER PlaybookIMPROVE COST STRUCTUREB alanced approach to create shareholder valueG&AS&MOMXCore GrowthR&DGrossMarginsREINVEST FOR GROWTHACCELERATE MARGINS & CORE GROWTH12 MARKETCOMPANYVALUATIONOur Strategic Approach to M&A Secular growth drivers Fragmented Higher barriers to entry Optionality with multi-industry portfolio Competitive market position Strong brand / channel Consistent revenue visibility Higher margin businesses Cultural fit Leadership assessment Focus on ROIC DBS opportunities Sustainability Synergies with DHR OpCos Combination of value & growth dealsSelectively pursuing value creation opportunities ROIC is Return on Invested Capital13 DANAHER Business System (DBS)14198419911999200120032005200720092 011201320152017 EEvolution of the DANAHER Business System (DBS)As portfolio evolved, so has DBS from Lean to a balanced approachOUR SHARED PURPOSEHELPING REALIZE LIFE S POTENTIALL eadershipLeanGrowthLeadershipLeanGrowthL eadershipLeanGrowthLeadershipLeanGrowthT ODAYMid-1980sLEAN FOCUSEDADDED GROWTH20012016 ADDED LEADERSHIP2009 LAUNCHED SHARED PURPOSE15 OMX is Operating Margin Expansion.

10 WC is Working REVENUE GROWTHOMXCASH FLOW / WC TURNSROICCUSTOMERQUALITY (EXTERNAL PPM)ON-TIME DELIVERY (OTD)ASSOCIATEINTERNAL FILL RATERETENTION8 CORE VALUE DRIVERSDBS Is Our Ultimate Competitive Advantage Common sense, vigorously applied LeadershipLeanGrowth1617 The Best Team WinsAssociates are key to sustaining our competitive advantageCreating a Culture of AND by building the BestWorkplacewith the BestPeopleLeadersAdvancing Diversity and Inclusion18 The res ult of DIVERSITY multiplied by INCLUSIVE behaviorsis a feeling of BELONGING which will ultimately accelerate associate at Danaher19 InnovationHelping Solve Problems Through InnovationPeopleHelping People Reach Their PotentialEnvironmentHelping Protect the EnvironmentDANAHER S SUSTAINABILITY PILLARSWe seek to lead the way in the areas that matter most to our stakeholders202020 Sustainability Report: Key DevelopmentsINNOVATIONENVIRONMENTGOVERNA NCEPEOPLENew medical device product safety disclosures and statistics: # of FDA-registered sites, classified according to risk level of products produced (Class I, II or III) FDA inspection results, 2017-2019 (Warning Letters/483 Observations) FDA recalls, 2017-2019, classified by risk level (Class I, II or III)New human capital metric disclosures: Gender diversity: globally Gender diversity: managerial roles POC diversity: US POC diversity: US managerial Voluntary turnover rateNew human capital improve-mentgoals: Gender diversity % globally: goal of 40% female by 2025 POC diversity % in US: goal of 35% by 2025 All NEOs had D&I-related personal objectives for 2020 New environmental impact reduction goals (2024 vs.)


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